SERVICES MARKETING

16MBA MM303
 To acquaint the students with the characteristics of
services and their marketing implications.

To discuss and conceptualize the service quality,

productivity in services, role of personnel in service
Objectives marketing and to manage changes in the
environment.
To familiarize the students with the GAPS model
and strategizing towards closing the GAPS for
effective services marketing.
Introduction to Services
Unit 1
  Concepts, contribution and reasons for the growth of
services sector, difference in goods and service in
marketing, characteristics of services, concept of
service marketing triangle, service marketing mix, GAP
models of service quality.
Topics to be  Consumer behaviour in services: Search, Experience
and Credence property, consumer expectation of
covered services, two levels of expectation, Zone of tolerance,
Factors influencing customer expectation of services.
 Customer perception of services- Factors that
influence customer perception of service, Service
encounters, Customer satisfaction, Strategies for
influencing customer perception.
  “Services are going to move in this decade to being the
front edge of the industry.”
 This quote from IBM’s former CEO, Louis V. Gerstner, illustrates the
changes sweeping across industry in the 21st century. Many
businesses that were once viewed as manufacturing giants are
shifting their focus to services. And, in many ways, IBM has led the
pack. Actions of Sam Palmisano, IBM’s CEO following Gerstner, have
reinforced this focus on service. In his tenure, Mr. Palmisano led IBM
in the expansion of its outsourcing businesses and accentuated its
Market insight focus on client solutions. He also led IBM in its purchase of
PricewaterhouseCoopers to gain broader strategic service consulting
expertise and in its focus in service “products” and solutions.
 In a company brochure IBM states that it is the largest service business
in the world. It is the global leader in information technology (IT)
services and consulting with approximately 200,000 service
professionals around the world. Through its Global Services division,
IBM offers product support services, professional consulting services,
and network computing services. Many businesses have outsourced
entire service functions to IBM, counting on the company to provide
the services better than anyone else.
  “Services are going to move in this decade to being
the front edge of the industry.” - Louis V. Gerstner,
2001
 The service side of IBM, including technology and business
services, brings in nearly $60 billion, significantly more than half
the company’s total revenue. The service strategy has been very
successful for IBM to date and promises to be the engine of
growth into the future.
Market insight  No one in IBM would suggest that these positive results have been
continued.. easily achieved. Switching from a manufacturing to a service and
customer focus is indeed a challenge. It requires changes in
management mind-set, changes in culture, changes in the ways
people work and are rewarded, and new ways of implementing
customer solutions. At IBM this change has evolved over decades
and continues today.
 This switch to service has carried over into IBM’s research division
as well, where hundreds of researchers worldwide currently focus
on service science and service innovation.
  Services are deeds, processes, and
performance provided or coproduced
What are by one entity or person for another
Services? entity or person
Sector-wise contribution of GDP of India
 1. Information technology revolution.
2. Increasing purchasing power of customers.
Reasons for growth 3. Urbanization and new markets.
of service sector in 4. Time starved consumers.
India
5. Growth of health, retail, bank and tourism
sector.
6. Source of tax for the government
 7. Huge employment opportunities.
8. Engineering, Management and semi skilled
sales force.
9. English speaking population.
Continued… 10.Low cost services.
11. Increased specialization and splintering (
Business standard)
12.Policy liberalization ( Business standard)
  Health Care
 Hospital, medical practice, dentistry, eye care
 Professional Services
 Accounting , legal, architectural
 Financial Services
 Banking, investment advising, insurance
Examples of  Hospitality
Service  Restaurant, hotel/motel, bed & breakfast,
 ski resort, rafting
Industries  Travel
 Airlines, travel agencies, theme park
 Others:
 Hair styling, pest control, plumbing, lawn maintenance,
counseling services, health club
  Defining and improving quality
 Communicating and testing new services
 Communicating and maintaining a consistent
image
Challenges for  Motivating and sustaining employee
Services commitment
 Coordinating marketing, operations and
human resource efforts
 Setting prices
 Standardization versus personalization
  Include those industries and companies
which are typically classified within the
service sector and whose core product
Service is a service.
industries and  E.g.:
 Taj Mahal Hotel (lodging)
companies  Air India (transportation)
 ICICI Prudential (Insurance)
 Fortis (health care)
  Service as a product
 Represents a wide range of intangible product
offerings that customers value and pay for in the
market place
 Customer Service
Concepts  Is the service provided in support of a company’s
core products (Call centre)
 Derived Service (New logic)
 Value derived from physical goods is really the
service provided by the good, not good itself
Very few products are purely intangible or totally tangible

services tend to be more

intangible than
manufactured products,
and manufactured
products
tend to be more tangible
than services
Why Service
Marketing?
 Service-Based Economies
Why Service
Marketing?
 Service as a Business Imperative
in Goods-Focused Businesses
 Most of the impetus came from
service industries such as
banking, transportation,
hospitality, and health care.
 Traditional service industries
have evolved and become even
more competitive
 Need for effective service
management and marketing
strategies
Xerox now provides a
document
management service,
whereby it can take
over the
management of all
documents (digital
and paper) within an
organization.
This type of service
lies far beyond its
typical printer repair
and maintenance
service business.
 1. Commoditization of products in many industries has
resulted in price and margin pressures on many
physical goods. Services can help firms to customize
Why are their offerings, adding value for customers.
Companies 2. Customers are demanding services and solutions,
choosing to especially in business-to-business markets.

focus on 3. Services often have higher profit margins than

products and can thus provide platforms for firm
services? profitability.
4. Many industries are highly competitive today and
service can be a differentiator in a crowded market.

Why Service
Marketing?
 Deregulated Industries and
Professional Service Needs
• Deregulation created turmoil
in the industry, accelerating
the need for more
sophisticated, customer-
based, and competition-
sensitive marketing.
• Providers of professional
services (such as physicians,
lawyers, accountants,
engineers, and architects)
have also demanded new
concepts and approaches for
their businesses as these
industries have become
increasingly competitive and
as professional standards
have been modified to allow
advertising.
Why Service
Marketing?
 Service Marketing Is
Different

• Businesspeople realized that marketing and

managing services presented issues and
challenges not faced in manufacturing and
packaged goods companies.
• People who moved from marketing in packaged
goods industries to marketing in health care,
banking, and other service industries found that
their skills and experiences were not directly
transferable.
Why Service
Marketing?
 Service Equals Profits

• In the final decades of the 20th century, many

firms jumped on the service bandwagon
• Investing in service initiatives and promoting
service quality as ways to differentiate
themselves and create competitive advantage.
  Despite the importance of service and the bottom-line
profit potential for service, consumers perceive that
overall the quality of service is declining.
 Reasons :
 With more companies offering tiered service based on the
But calculated profitability of different market segments, many
customers are, in fact, getting less service than they have in
“Service the past.
 Increasing use by companies of self-service and technology-
Stinks” based service is perceived as less service because no human
interaction or human personalization is provided.
 Technology-based services (automated voice systems,
Internet-based services, technology kiosks) are hard to
implement by companies and difficult to use by customers,
with many failures and with poorly designed systems in place.
  Reasons :
 Customer expectations are higher in all industries
because of the excellent service they receive from
some companies.
 Organizations have cut costs to the extent that
But they are too lean and too understaffed to provide
quality service.
“Service  The competitive job market results in less-skilled
people working in frontline service jobs; talented
Stinks” workers soon get promoted or leave for better
opportunities.
 Many companies give lip service to customer focus
and service quality, but they fail to provide the
training, compensation, and support of employees
needed to actually deliver quality service.
Characteristics
of Services
Comparing
Goods and
Services
Service
Marketing Mix
  People
 All human actors who play a part in service
delivery and thus influence the buyer’s
perceptions:
 Include, the firm’s personnel, the customer,
and other customers in the service
environment.
Expanded Mix
 Physical evidence
for Services  The environment in which the service is
delivered and where the firm and customer
interact, as well as any tangible components
that facilitate performance or communication
of the service.
 E.g.: brochures, letterhead, business cards,
reports, signage, equipment, and web pages
  Physical evidence (continued..)
 In some cases it includes the physical facility
where the service is offered—the
“servicescape”
 E.g.: A retail bank branch facility
 Physical evidence cues provide excellent
Expanded Mix opportunities for the firm to send consistent
and strong messages regarding the
for Services organization’s purpose, the intended market
segments, and the nature of the service.
 Process
 The procedures, mechanisms, and flow of
activities by which the service is delivered—
the service delivery and operating systems.
Services
Marketing Mix
Southwest
Airlines:
Aligning
People,
Processes,
and Physical
Evidence
The Columbia
Asia – A
Service
Culture that
Differentiates
Services
Marketing
Triangle
  Organizations that seek to provide consistently
high levels of service excellence will
Aligning the continuously work to align the three sides of
Triangle the triangle.
 Aligning the sides of the triangle is an ongoing
process.
Points of the Triangle

 Internal Marketing
 Marketing issues include adequate training on the services to be
delivered and customer satisfaction service techniques.
 Internal marketing requires you to be involved with your
employees and let them know the goals and even problems
facing the business.
 Internal marketing also can include a performance rewards
system for employees who deliver the highest level of customer
service
Points of the Triangle

 External Marketing
 External marketing goes from your business organization out to
customers and prospective customers.
 This is the traditional form of business marketing, showing
customers how the services provided by your business benefit
them.
 External marketing includes advertising, your website and your
company's social media efforts.
 The purpose of external marketing is to fill the business pipeline
with future business.
Points of the Triangle

 Interactive Marketing
 This form of marketing revolves around how your employees
deliver the services your company provides.
 The goal is to have highly satisfied customers who become long-
term, repeat customers.
 The effectiveness of the interactive marketing relates back to
the internal marketing efforts of your business.
 Interactive marketing is also how your employees keep the
promises made by your external marketing efforts.
 Specific Service
Overall Strategic Assessment
Implementation

 How is the service  What is being promoted

Ways to Use organization doing on all and by whom?
three sides of the
the triangle?
 How will it be delivered
and by whom?
Services  Where are the
 Are the supporting
Marketing weaknesses? systems in place to
Triangle  What are the strengths? deliver the promised
service?
Service
Triangle and
Technology
  Every customer has an
ideal expectation of the
service they want to
receive when they go to a
restaurant or store.
What is service  Service quality measures
how well a service is
quality? delivered, compared to
customer expectations.
 Businesses that meet or
exceed expectations are
considered to have high
service quality.
Service Quality
Gaps Model of
Service
Quality

Developed by A. Parasuraman, Valarie A. Zeithaml and Len Berry

The Customer
GAP
  Difference between customer expectations and
perceptions
 Customer expectations are standards or
reference points that customers bring into the
service experience
The Customer  Are subjective assessments of actual service
GAP experiences
 Often consist of what ca customer should or
will happen
 “Delivering quality service must begin with a
clear understanding of its customers”
 Marketer controlled factors Factors that the marketer has
limited ability to affect

The Customer  Pricing  Innate personal needs

GAP  Advertising  Word of mouth
 Sales promises communications
Sources of  Competitive offerings
customer
expectations
  To close the all important customer gap four
The Provider other gaps needs to be closed
GAPS  These gaps occur within the organisation
 1 2 3 4
GAP 1: The GAP 2: The GAP 3: The GAP 4: The
listening gap service design Service Communication
and standards performance gap gap
gap

The Provider GAPS

  Is the difference between customer
expectations of service and company
Provider GAP 1: understanding of those expectations
The Listening  Reasons could be :
Gap  No direct interaction
 Unwilling to ask about expectations
 Unprepared to address
 Difference between company
understanding of customer expectations
and the development of customer driven
service designs
Provider GAP 2:
The Service Reason could be :
 Management believe that customer
design and expectations are unreasonable or
Standards Gap unrealistic
 Degree of variability in service defies
standardisation
Provider gap 2:
The Service design and Standards
Gap
 Presence of service designs and
performance standards that
reflect those accurate perceptions
 Difficulty is translating customer
expectations into service quality
specification that employees can
understand and execute.
  Is the discrepancy between the development of
customer driven service standards and actual
service performance by company employees
Provider GAP 3:  Reasons could include:
The Service  Employees who don’t clearly understand the
rules
Performance  Customer not performing the role properly
gap  Delivering service through intermediaries like
retailers
 Demand supply synchronisation
  Company Standards must be backed by
Provider GAP 3:  People
The Service  Systems
 Technology
Performance  Narrowing the performance gap by ensuring
gap that all resources needed to achieve the
standards are in place
  Difference between service delivery and service provider’s
external communication
Provider GAP 4:  Promised made by the company through media advertising, sales
force and other communication raise expectations
The
 Broken Promises occur due to:
Communication  overpromising through advertising
gap  Inadequate coordination between operations and marketing
 Differences in policies and procedures across service outlets
Closing the
customer gap
by closing all 4
provider gaps
7 GAPS Model
of Service

7 GAPS MODEL BY CHRISTOPHER LOVELOCK

 1. Knowledge gap: Learn what customers
expect
 Understand customer expectations
 Improve communication between frontline staff
Prescriptions and management
 Turn information and insights into action
for Closing the
Seven Service 2. Standards gap: Specify SQ standards that
reflect expectations
Quality Gaps  Set, communicate, and reinforce customer-
oriented service standards for all work units
 Measure performance and provide regular
feedback
 Reward managers and employees
 3. Delivery gap: Ensure service performance meets
standards
 Clarify employee roles
 Train employees in priority setting and time
management
 Eliminate role conflict among employees
Prescriptions  Develop good reward system
for Closing the 4. Internal communications gap: Ensure that
communications promises are realistic
Seven Service  Seek comments from frontline employees and
operations personnel about proposed advertising
Quality Gaps campaigns
 Get sales staff to involve operations staff in meetings
with customers
 Ensure that communications sets realistic customer
expectations
 5. Perceptions gap: Educate customers to see
reality of service quality delivered
 Keep customers informed during service delivery
and debrief after delivery
Prescriptions  Provide physical evidence
for Closing the 6. Interpretation gap: Pretest communications
Seven Service to make sure message is clear and
unambiguous
Quality Gaps  Present communication materials to a sample of
customers in advance of publication
7. Service gap: Close gaps 1 to 6 to meet
customer expectations consistently
Consumer
behaviour
in services
  Consumer Behaviour is the process and activities
people engage in when searching for selecting,
purchasing, using, evaluating and disposing of products
and services so as to satisfy their needs and services
 Who buys products or services?
Consumer  How do they buy products or services?
 Where do they buy them?
Behaviour  How often do they buy them?
 How often do they use them?
 When do they buy them?
 Why do they buy them?
  Search qualities
 Attributes that a customer can determine before
purchasing a product
 Include colour, style, price, fit, feel, hardness, and smell
 E.g.: Clothing, furniture, and jewellery are high in
search qualities
Search,  Experience qualities
Experience,  Attributes that can be discerned only after purchase or
during consumption.
and Credence  Include taste, wearability, and comfort
 E.g.: Vacations and restaurant meals are high in
Qualities experience qualities
 Credence qualities
 Characteristics that the consumer may find impossible
to evaluate even after purchase and consumption.
 E.g.: Appendix operations and computer software
updates.
Search,
Experience,
and Credence
Qualities
Customer
Expectation of
Service
The greatest gap between customer expectations
and service delivery exist when customers travel
from one country to another
  Customer expectations are beliefs about service
delivery that serve as standards or reference points
against which performance is judged.
 Knowing what the customer expects is the first and
possibly most critical step in delivering good quality
service
Customer  What types of expectation standards do customers
Expectation of hold about services?
Service  What factors most influence the formation of these
expectations?
 What role do these factors play in changing
expectations?
 How can a service company meet or exceed customer
expectations?
 Expectations are reference points against
which service delivery is compared is only
Customer a beginning.
Expectations-
The level of expectation can vary widely
Meaning depending on the reference point the
customer holds
Possible levels
of Customer
Expectations-
In the context
of a Restaurant
Expected
service:
Levels of
expectations
  Desired service
 The level of service the customer hopes to receive
 The ‘wished for’ level of performance.
 Desired service is a blend of what the customer
Expected believes ‘can be’ and ‘should be’.
service:  Customers typically hold similar desired
expectations across categories of service, but these
Levels of categories are not as broad as whole industries.
expectations  Adequate service
 Threshold level of acceptable service
 Adequate service represents the ‘minimum
tolerable expectation’, or the bottom level of
performance acceptable to the customer.
The Zone of
Tolerance
  The extent to which customers recognize and
are willing to accept this variation is called the
zone of tolerance
 If service drops below adequate service
The Zone of customers will be frustrated and their
satisfaction with the company will be
Tolerance undermined.
 If service performance is higher than the zone
of tolerance at the top end customers will be
very pleased and probably quite surprised as
well
  Different customers possess different zones of
tolerance
 Zones of tolerance vary for service dimensions
 Customers’ tolerance zones also vary for different
The Zone of service attributes or dimensions.
Tolerance  More important the factor, the narrower the zone
of tolerance is likely to be.
 Customers are likely to be less tolerant about
unreliable service (broken promises or service
errors) than other service deficiencies
Factors that
influence customer
expectations of
service
 Sources of desired
service expectations
  Sources of desired service expectations
 Personal needs
 Are those states or conditions essential to the
physical or psychological well-being of the
Factors that customer
influence  Are pivotal factors that shape what customers
desire in service
customer  Personal needs can fall into physical, social,
expectations psychological and functional.
of service  Basic hunger expectations
 Customer who is very hungry has less expectations
 Customer with high social dependency has high
expectations
  Sources of desired service expectations
 Personal service philosophy
 The customer’s underlying generic attitude
about the meaning of service and the proper
Factors that conduct of service providers.
influence
• If you have ever been employed as a
customer member of waiting staff in a restaurant, you
expectations are likely to have standards for restaurant
service.
of service • You might, believe that waiters should not
keep customers waiting longer than 15
minutes to take their orders.
• You may be less tolerant of lukewarm food
or errors in the order than customers who
have not held the role of waiter
  Sources of desired service expectations
 Derived service expectations
 Occur when customer expectations are driven by
another person or group of people.
Factors that
influence
• A parent choosing a vacation for the family,
customer a spouse selecting a home-cleaning service,
expectations • Customers’ individual expectations are
intensified because they represent and
of service must answer to other parties who will
receive the service.
• Business-to-business customers may also
derive their expectations from their
managers and supervisors.
Factors that influence
customer expectations
of service
Sources of Adequate service expectations
 Factors that
influence customer
expectations of
service
• Sources of
Adequate service
expectations
  Sources of Adequate service expectations
 Perceived service alternatives
 Are other providers from whom the customer can
obtain service.
Factors that  If customers have multiple service providers to
influence choose from, or if they can provide the service for
themselves (personal grooming), their levels of
customer adequate service are higher than those of customers
who believe it is not possible to get better service
expectations elsewhere.
of service An airline customer who lives in a provincial town with a small
airport, has a reduced set of options in airline travel. This
customer will be more tolerant of the service performance of the
carriers in the town because few alternatives exist. He or she will
accept the scheduling and lower levels of service more than will
the customer in a big city who has numerous flights and airlines
to choose from.
 Sources of Adequate service expectations
Situational factors
 Service performance conditions that customers
Factors that view as beyond the control of the service
provider.
influence 1. Uncontrollable situational factors
customer 2. Personal situational factors
expectations
of service Where personal emergencies such as serious car accidents would
likely intensify customer service expectations of insurance
companies (because they are temporary service intensifiers)
Catastrophes that affect a large number of people at one time
(floods or storms) may lower service expectations because
customers recognize that insurers are inundated with demands
for their services
  Sources of Adequate service expectations
 Predicted Service
 The level of service that customers believe they are
likely to get
Factors that  Implies some objective calculation of the probability
of performance or estimate of anticipated service
influence performance level.
customer  If customers predict good service, their levels of
adequate service are likely to be higher than if they
expectations predict poor service
of service
Mobile phone coverage during travelling to remote places
In this case, levels of adequate service decrease and zones of
tolerance widen.
Sources of both desired and predicted service
expectations

 Explicit service promises

 Are personal and non-personal statements about the service
made by the organization to customers.
 Personal -when communicated by salespeople or service or
repair personnel
 Non-personal when they come from advertising, brochures and
other written publications.
 One of the few influences on expectations that are completely in
the control of the service provider.
Explicit service
promises

Promising exactly what

will ultimately be
delivered would seem a
logical and appropriate
way to manage
customer expectations
and ensure that reality
fits the promises.
Sources of both desired and predicted service
expectations

 Implicit service promises

 Are service-related cues other than explicit promises that
lead to inferences about what the service should and will be
like.
 Quality cues are dominated by price and the tangibles
associated with the service.
 In general, the higher the price and the more impressive the
tangibles, the more a customer will expect from the service.
Sources of both desired and predicted service
expectations

 Word-of-mouth communication
 Personal and non-personal statements made by parties other
than the organization convey to customers what the service will
be like and influence both predicted and desired service.
 Perceived as unbiased.
 Tends to be very important in services that are difficult to
evaluate before purchase and before direct experience of them.
 Experts (including consumer reports, friends and family) are also
word-of-mouth sources
 Sources of both desired and predicted service
expectations

 Past experience
 Customer’s previous exposure to
service that is relevant to the focal
service
 E.g.: You probably compare each stay
in a particular hotel with all previous
stays in that hotel.
Customer
Perception
of Services
Customer
Perceptions are Quality and
Perception of always considered satisfaction is based
Services relative to on customer’s
expectations perception of service
Satisfaction vs
Service Quality
 Reliability: ability to perform the promised service
dependably and accurately
Responsiveness: willingness to help customers and
provide prompt service
Service Quality Assurance: employees’ knowledge and courtesy
Dimensions and their ability to inspire trust and confidence
Empathy: caring, individualised attention given to
customers
Tangibles: appearance of physical facilities,
equipment, personnel and written materials.
 Satisfaction is generally
Based on this view,
viewed as a broader
perceived service quality is a
concept, whereas service
component of customer
quality focuses specifically
satisfaction
on dimensions of service

Satisfaction versus Service Quality

  Customers will have perceptions of single, transaction-
specific encounters as well as overall perceptions of a
company based on all their experiences
 Research suggests that the points of view are
Transaction complementary rather than competing
versus  Understanding perceptions at the transaction-specific
level is critical for diagnosing service issues and making
Cumulative immediate changes
Perceptions  Cumulative experience evaluations are likely to be
better predictors of overall loyalty to a company
 Customer loyalty most often results from the
customer’s assessment of all his experiences, not just
from one single encounter
 1. Service Encounters:
 Every encounter sums up to the customer
satisfaction
2. Service Evidence
Factors that  People: Employees and Customers
influence  Process: Operational flow of activities, Technology
vs Human
customer  Physical Evidence: Tangible servicescape,
perception guarantee, technology, website
3. Organizational Image
4. Price
  Measure and manage customer satisfaction
 Aim for customer quality and satisfaction in every
service
 Plan for effective recovery
 Facilitate adaptability and flexibility
Strategies for
 Encourage spontaneity
influencing  Help employees cope with problem customers
customer  Manage dimensions of quality at encounter level
perception  Evidence of service
 Communicate and create realistic image
 Enhance customer perception of quality and value
through pricing
Service Encounters:
The Building Blocks for
Customer Perceptions
Service Encounters
 The core of service element is the
interaction between those providing
services and the customer
 Every service encounter provides a
snapshot of organization’s service
quality and an opportunity to build
satisfaction
 Initial encounter will create a first
impression of the organisation
Service encounter or moments of truth are where promises
are kept or broken
Linking of the
moments of
truth as a
service
encounter
cascade
 Remote
encounters
Types of
Service
Encounters Face-to-
Telephone
face
encounters
encounters
Types of Service
Encounters
 Remote encounters
 Encounters can occur without any
direct human contact
 E.g.: When a customer interacts
with a bank through the ATM
system
 More and more services are being
delivered through technology,
particularly with the advent of
internet applications
Types of Service
Encounters
 Telephone encounters
 In many organisations
(such as insurance
companies, utilities and
telecommunications)
the most frequent type
of encounter between an
end customer and the
firm occurs over the
telephone
Types of Service
Encounters
 Face-to-face encounters
 Occurs between an
employee and a
customer in direct
contact
  Research uses the critical incident technique to get
customers and employees to provide verbatim stories
about satisfying and dissatisfying service encounters
Sources of they have experienced
Pleasure and  When did the incident happen?
Displeasure in  What specific circumstances led up to this situation?

Service  Exactly what did the employee (or firm member) say or
do?
Encounters  What resulted that made you feel the interaction was
satisfying (or dissatisfying)?
 What could or should have been done differently?
 Service Employee response to service delivery system
recovery failures
Sources of
customer Adaptability
Employee response to customer needs and
satisfaction/ requests
dissatisfaction in
memorable Spontaneity Unprompted and unsolicited employee actions
service
encounters
Coping Employee response to problem customers
Service Encounter Themes
Service Encounter Themes
Service Encounter Themes
Service Encounter Themes
Customer Satisfaction
 Satisfaction is the consumer’s fulfilment
response.
 It is a judgment that a product or service
feature, or the product or service itself, provides
a pleasurable level of consumption-related
fulfilment.’
 Satisfaction is the customer’s evaluation of a
product or service in terms of whether that
product or service has met the customer’s needs
and expectations
  Product and Service Features
 Satisfaction with a product or service is influenced
significantly by the customer’s evaluation of
product or service features.
What  E.g.: A service such as a resort hotel, important
features might include the pool area, access to golf
Determines facilities, restaurants, room comfort and privacy,
Customer helpfulness and courtesy of staff, room price, and
so on.
Satisfaction?
 Consumer Emotions
 Affect their perceptions of satisfaction with
products and services.
 Emotions can be stable, pre-existing emotions
  Attributions for Service Success or Failure
 Attributions – the perceived causes of events –
influence perceptions of satisfaction as well.
What  When they have been surprised by an outcome (the
Determines service is either much better or much worse than
expected), consumers tend to look for the reasons,
Customer and their assessments of the reasons can influence
Satisfaction? their satisfaction.
 E.g.: if a customer of a weight-loss organisation
fails to lose weight as hoped for, he or she will likely
search for the causes
  Perceptions of Equity or Fairness
 Notions of fairness are central to customers’
perceptions of satisfaction with products and
services, particularly in service recovery situations
What  Customers ask themselves:
Determines  Have I been treated fairly compared with other
Customer customers?
 Did other customers get better treatment, better
Satisfaction? prices, or better quality service?
 Did I pay a fair price for the service?
 Was I treated well in exchange for what I paid and
the effort I expended?
What Determines
Customer Satisfaction?
 Other consumers, family
members and co-workers
 One’s own individual feelings and
beliefs, consumer satisfaction is
often influenced by other people
 E.g.: Satisfaction with a family
holiday is a dynamic phenomenon,
influenced by the reactions and
expressions of individual family
members over the duration of the
holiday
End of Module 1